Elon Musk tries again. For over two years, one of its main objectives has been to double production at the Shanghai gigafactory to 1 million vehicles. This is a crucial step to continue to grow the volumes of Tesla, which to date has reached a total of 4 million, in 2022 it reached 1.3 million, but which by 2030 wants to reach even 20 million per year, a goal considered too ambitious by some analysts. One major move in this regard is the establishment of a plant in Mexico that is expected to produce a more affordable electric car based on the next-generation Model 2 platform. This more affordable electric alone is expected to be worth around 4 million units. .
Diplomatic mission
Meanwhile the CEO of the first electric car manufacturer, according to rumors released by Reuters, will fly to China this week, after an absence of three years. Musk is expected to meet with high-level officials and tour the Tesla plant, according to the sources. Industrial diplomacy that has well-founded reasons.
China is Tesla’s second-largest market after the United States, and the Shanghai plant is currently the electric car maker’s largest production hub. Tesla has just achieved a historic milestone, namely placing one of its cars, the Model Y, at the top of the best-selling cars in the first quarter of 2023. All cars, not just electric ones. But the competition from Chinese manufacturers, which in the first quarter surpassed the Japanese in exports with over one million cars (a full 58% more than in the same period of 2022), is becoming increasingly tough. While the economic situation weakens the demand. Also for this Tesla has become the protagonist of an unprecedented sequence of price cuts in this first part of the year. Watchwords: push volumes even at the cost of limiting profitability.
Fighting with over 100 Chinese manufacturers
The Austin-based company has not yet provided any updates on plans to increase production in Shanghai by 450,000 vehicles, although in April it announced the construction of a plant, also in Shanghai, to produce energy storage batteries. Tesla then filed plans with local authorities to expand powertrain production capacity to 1.75 million units annually.
Requests, here’s the problem, which clash with Beijing’s plans, to grapple with excessive capacity in the automotive industry (there are over 100 manufacturers). Musk himself admitted to CNBC a few weeks ago that “there are some limitations to our expansion capacity in China”. And “it’s not a problem with the question”. In the same interview, the South African-born businessman said that tensions between the United States and China are nothing but worrying. Among other things, Musk also owns the social media platform Twitter, which is banned in China.